Top Public Policy Issues Facing Governing Boards in 2023–2024:
Monitoring increased regulations in a divided Congress.
With control of Congress split between a narrow Republican majority in the House and the Democrats’ slim edge in the Senate, Capitol Hill watchers at higher education associations in Washington have seen increased regulation and renewed and invigorated efforts to attach more strings to federal dollars. Some of the key issues on policymakers’ radars that boards should stay abreast of relate to endowments, Title IX, gainful employment, accreditation, intellectual property, and student outcomes.
Updated November 22, 2023.
Endowment Bills
Although most college endowments posted dramatically higher investment returns in 2021, according to the National Association of College and University Business Officers (NACUBO), that rise was followed by the stock market’s worst year since 2008. As a consequence, NACUBO’s endowment study for 2022 showed roughly a 4 percent decline in endowment market values.
Despite that decline, however, colleges and universities with large endowments continue to draw the attention of Republican lawmakers. Several bills were introduced in the 117th Congress that sought to increase the endowment excise tax passed as part of the 2017 Tax Cut and Jobs Act. Other bills would have required colleges with endowments of a certain size to limit tuition increases or devote substantial endowment funds to institutional student aid to avoid higher levels of taxation. Still other legislation has sought to prohibit investment of endowment assets in entities and governments deemed hostile to the United States, China foremost.
Some of these bills were reintroduced in the 118th Congress, and likely more proposals in this area will follow. Expect private institutions with the largest endowments to remain the chief targets. Some higher education advocates fear such a move could be a first step toward undermining the sector’s tax-exempt status. New bills have yet to materialize, but a hearing is likely on endowments and other higher ed topics.
Title IX
A half-century after the enactment of Title IX, the civil rights law that bars discrimination by sex in schools and colleges, the federal government is still wrestling with its scope and how to enforce it. Former President Trump pushed rule changes to “restore fairness” and provide due process rights to those accused of sexual harassment, whom he said often faced decks stacked against them by college bureaucrats. As a presidential candidate, Biden decried the Trump rules, saying they would “shame and silence survivors” of sexual abuse, and when Biden came into office, he immediately set out to undo the Trump changes.
On June 23, 2022, the law’s 50th anniversary, Biden and Education Secretary Miguel Cardona proposed far-reaching changes including barring discrimination by sexual orientation or gender identity. Cardona said they would “ensure all our nation’s students—no matter where they live, who they are, or whom they love—can learn, grow, and thrive in school.” The rules drew nearly 350,000 public comments in the two-month window that was open to them. Biden’s proposed changes would permanently eliminate the live hearing requirement, revert to the pre-Trump definition of sexual harassment, and add gender protection for LGBTQ students. The Department of Education also proposed a separate rule on Title IX’s application to sports and specifically “what criteria recipients may be permitted to use to establish students’ eligibility to participate on a particular male or female athletic team,” a controversial issue in some states. Already, 18 states bar transgender students from playing on teams other than the sex listed on their birth certificates.
It is no easy matter to change rules as complex and far reaching as the Title IX regulation. Trump entered office in 2017 intent on overhauling Title IX, yet it took his Secretary of Education, Betsy DeVos, until his last year in office to publish a 2,000-page final rule. A federal judge in Massachusetts vacated a section of the DeVos rule that barred campus investigators from relying on complainants’ or witnesses’ testimony unless they were subjected to cross-examination in a live hearing. In May 2023, the Department of Education announced that it would delay releasing the final version of its Title IX regulations at least until October 2023.
Gainful Employment
The Biden administration reestablished the gainful employment rule for programs at career colleges and certificate programs at all other higher education institutions. The rule first went on the books in the Obama administration in 2015 but was withdrawn under President Trump. In addition to adopting the Obama administration’s requirements for programs to meet certain debt-to-earnings ratios or lose Title IV funding, the Biden rule would tie student aid eligibility to whether program completers are making as much money as high school graduates. The intent of the rule from the beginning was to stop programs at for-profit career colleges and certificate programs at other colleges from saddling their students with large debt for low-paying careers. DeVos repealed it in 2019, but the Biden administration’s action will mean the rule will take effect in the summer of 2024.
Accreditation
The Department of Education, in unveiling its regulatory agenda for 2023, said it will seek to amend its regulations on many aspects of what the agency requires of its Title IV accreditors. Without that federal seal of approval, the colleges that an agency accredits can lose eligibility to participate in the federal student aid programs.
Separately, the department issued guidance in July 2022 telling institutions they must demonstrate “reasonable cause” for changing their accreditation agency. It said it would not allow an institution to change accreditation agencies “to lessen oversight or rigor, evade inquiries or sanctions, or the risk of inquiries or sanctions by its existing accrediting agency.” Antoinette Flores, a senior adviser at the department, [wrote that the goal] was to prevent “a race to the bottom” by institutions seeking looser accreditation standards.
The guidance was issued in response to a Florida law requiring state colleges and universities to switch accreditors every five years. Florida sued the department over its accreditation stance. North Carolina passed a similar bill in the fall of 2023. The outcomes of these efforts are worth watching and may portend similar legislation in other states in the future.
Intellectual Property and China
Also on the regulatory front, colleges and universities will be tasked with enforcing new CHIPS and Science Act rules to prevent the potential theft of high-tech intellectual property by China. The bipartisan bill, signed into law in August 2022, will funnel $280 billion to grow domestic semiconductor manufacturing and research to make the United States less reliant on foreign suppliers, especially China. The law requires the U.S. Secretary of Energy to “manage and mitigate research security risks” and impose penalties on funding recipients that violate protocols to prevent loss of U.S. intellectual property and safeguard national security.
Some provisions will steer CHIPS research grants to historically Black colleges and universities and other minority-serving institutions, as well as tribal colleges and community colleges. Senator Roger Wicker of Mississippi, the then top Republican on the Senate Committee on Commerce, Science, and Transportation, said the CHIPS Act includes “important research security guardrails,” including a training requirement for researchers to beware of “so-called malign foreign talent recruiting programs.”
It also requires universities’ applying for National Science Foundation (NSF) grants to disclose agreements and gifts from China and “other countries of concern,” and bars institutions with Confucius Institutes from getting NSF funding. More than 100 U.S. colleges and universities once hosted Confucius Institutes supported by China’s government to promote Chinese language and culture. That number rapidly shrank, however, after Congress prohibited host institutions from receiving U.S. Department of Defense funding due to charges of nefarious Chinese influence.
A National Academies of Sciences, Engineering, and Medicine panel recently recommended changes that would make it easier for institutions to get waivers from the U.S. Department of Defense, allowing them to again host a Confucius Institute. The National Academies experts said they were “not aware of any evidence at the unclassified level that (Confucius Institutes) were ever associated with espionage or intellectual property theft. While incidents affecting academic freedom, freedom of expression, and shared governance did take place, the most egregious of these happened at (institutes) outside of the United States.” It remains to be seen whether any colleges will seek to reopen institutes in this climate or whether China will want to keep supporting them.
If early discussions in Congress and the Biden administration are any indication, concerns about the Chinese Communist Party, the theft of intellectual property, propaganda, espionage, and undue influence will intensify over the next two years. Colleges and universities will need to proceed with caution.
Student Outcomes
The federal government is not alone in calling upon colleges to be more accountable and transparent; states are increasingly demanding that, as well. They are considering or have taken action to ensure that institutions aren’t obfuscating the costs of college for students and are being more forthcoming to students about the job prospects in their chosen fields. According to the nonprofit Data Quality Campaign, eight states—Arizona, Arkansas, Kansas, Kentucky, Maine, Tennessee, Virginia, and West Virginia—now require disclosures about student outcomes. In addition, seven more considered legislation in 2022—and are likely to consider it again in current legislative sessions—that would go beyond the federal College Scoreboard in reporting student indebtedness and post-college incomes by major. The Scorecard extrapolates data only from Pell Grant recipients.
The Biden administration also took action in this area, promulgating final rules on “fair value transparency.” The rule governs whether programs to which the gainful employment rule does not apply meet the gainful employment rule’s debt-to-earnings metrics. While no non-gainful employment programs would lose access to Title IV aid, the department will publish this information on a website starting in July 2026 and require students in certificate and graduate programs to acknowledge programs that fail these metrics in order for such students to receive federal student aid.
Questions for Boards
- In the context of accreditation and institutional quality, how well does our institution perform in graduating students in a timely fashion and helping them find gainful employment?
- Is the institution staying abreast of student completion rates and employment attainment rates and communicating that data clearly to its major constituencies, including legislators and other policy makers?
- Given that the Title IX regulations issued by the Trump administration are being revised by the Biden administration, how will our necessary administrative and legal processes be managed?
- What, if any, programs, research, contract or grant support does our institution receive from China or Chinese entities? Are we confident that this support conforms to government and institutional policies on transparency, academic freedom, free expression, and the like?
